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Will fiscal cliff fears slam your 401(k)?

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    How to protect your hard-earned money

  • Duration 3:11
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Fears of being -- fiscal -- smacking stocks this week and it comes as we're finding out the average bounced for -- 401K retirement account.

A record high near 76000.

Dollars if congress lets the club hit that's part -- will take ahead don't I don't want to know what shouldn't be doing right now to protect them.

Tell us.

I think they should be doing what I've I've been doing lately that's what more my money at a percentage wise in cash and what you're seeing what 41 -- is rising as more Americans are saving because they're scared of what's going to happen.

Which is good for individual Americans back -- the short term economy.

If it capital gains and dividend tax is raised the -- -- good from the government revenue or not it's -- very bad the stock market if we go over the fiscal cliff.

You know -- that the feeling is that investors are gonna be discouraged from investing in stocks especially those that pay dividends.

Well it may be true but you know it -- its not gonna go over the fiscal cliff is as stupid as congress is they -- they can't avoid this -- got to do something about it I mean.

And they've got to reach across the -- and they -- eventually going to find some solution for this.

But in the meantime you're you're John makes a point about this in the in the sense that there there is.

Of course in 0401 K your of your cash does grow without taxes.

But sooner -- related is stacked and I think that that that the point that you're making his good in the -- to -- but I have to look for something else in the stock market is gonna suffer in the short run I.

It's -- certain thing that does this right certain.

And that's a good point and you know what Tracy out again you know going back to the value of these stocks in our -- -- are going to pound -- that they would -- that's a concern right because we need to be clear that.

Dividends reinvested in a 401K are not taxed so when they figure this out you don't pay dividend tax when your stocks are in a 401K.

When they think this cat and you will right let's be clear -- under the gun here presuming we're going to the -- fund dividend taxes and they are -- got to compromise I just got to be -- radeon you have to believe there will be compromised so let's not forget any time.

Go revisit your 41 K and reallocate -- advice to.

-- Well I think what happened and viewers and all rational people are really in a -- I -- the trying to make.

Long term decisions and trying to follow government that clearly Clinton thinking day -- day if not maybe we do we -- before lucky I think the panel makes the point.

Well taxes hurt wealth creation across the board I think it's gonna result in inflation saying that's why investors need to stop getting out of the -- are getting out of the -- He spent the last five years getting in -- what do you -- people that are discouraged right now.

Write their congressman.

And I don't think that there's going to be a fiscal cliff.

For two reasons one is because of this clip.

This fiscal -- Is incredibly unpopular on both sides of the -- secondly unlike the grand hot Gramm Rudman Hollings -- of 85 in the budget enforcement act of 91.

You don't have strong enforcement provisions in this -- I know it's an inside baseball point but it's very easy for congress to get past this.

I mean the point here that everyone should keep in mind is that the fiscal cliff was a Republican idea because the Republicans want it to extend the debt ceiling and a debt neutral way this was the way they were gonna do it.

Now there everybody saying including the Republicans that's a bad idea to do that when the -- over -- GDP which is exactly argument President Obama was making in 2011.

Julian Epstein thank you for joining us -- great -- again thanks for having me.

-- coming up so they.

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